Coinbase, one of the leading cryptocurrency exchanges, is reportedly in advanced talks to acquire Deribit, the world’s largest platform for trading Bitcoin (BTC) and Ether (ETH) options. This potential acquisition would strengthen Coinbase’s existing derivatives platform, which currently focuses on futures trading.

According to sources, Coinbase and Deribit have already informed regulators in Dubai about the deal talks. Deribit holds a license in Dubai, which would need to be transferred to Coinbase if the deal goes through. In January, Bloomberg reported that the deal could value Deribit at around $4-5 billion.

Deribit offers options, futures, and spot trading for various cryptocurrencies. Last year, its total trading volumes reached $1.2 trillion, making it a highly sought-after platform in the crypto market. This potential acquisition comes just a day after Kraken, another major exchange, announced its plans to acquire derivatives trading platform NinjaTrader for $1.5 billion.

The popularity of cryptocurrency derivatives, such as futures and options, has been on the rise in the US. These financial instruments are favored by both retail and institutional investors for hedging and speculation purposes. In fact, Coinbase reported a 10,950% increase in derivatives trading volumes in 2020.

Other major players in the market, such as Robinhood and CME Group, have also been expanding their offerings in the derivatives space. In February, CME Group reported a 300% increase in average daily trading volumes for crypto derivatives in the fourth quarter of 2020. And just last month, Coinbase launched the first Commodity Futures Trading Commission-regulated Solana (SOL) futures in the US, while CME Group launched its own SOL futures contracts shortly after.

This potential acquisition of Deribit by Coinbase is a clear indication of the growing demand for cryptocurrency derivatives in the market. As the market continues to mature, we can expect to see more developments and innovations in this space. Stay tuned for more updates on this exciting development.